What Should I Charge?

Two honest numbers, not one guess

Pricing your own time is hard because there is no boss handing you a salary band. This tool gives you two reference points instead of a single made-up figure. The first is what the market pays people in your line of work. The second is what you personally need to charge to hit your income goal. Read them together and you have a sensible range to price inside.

Where the market range comes from

The market range uses the U.S. Bureau of Labor Statistics Occupational Employment and Wage Statistics program, the government's annual survey of wages by occupation and state. We map your experience level to wage percentiles: new to the 25th, experienced to the median, and expert to the upper quartile.

One important caveat, and the reason this tool does not stop at the market number: that survey covers employees and leaves out self-employed workers. So the figure is a solid anchor for what the work is worth, but as a freelancer you usually need to charge more than an employee earns, because you are also covering your own taxes, downtime, tools, and overhead. That is exactly what the break-even rate below accounts for.

How the break-even rate is calculated

Your break-even rate is the floor you can charge without going backwards on your income goal. The math is straightforward:

• Take your desired annual income and gross it up for self-employment tax, so the money left after tax still matches your goal.
• Add your annual business expenses.
• Divide by your annual billable hours, which is your billable hours per week times 50 weeks (allowing about two weeks off a year).

We use the current U.S. combined Social Security and Medicare self-employment tax rate of 15.3% as the default, published by the IRS. The billable-hours and business-expense figures start from a Solo or Small team preset, and you can change both under "Adjust assumptions" to match your own situation.

FAQs